2.3 Under this arrangement, certain decision-making responsibilities are delegated to the administrator of the CIF (‘the CIF administrator’ ). The CIF Administrator is responsible for the following in respect of assets held in the CIF:
• Providing access to a range of asset classes, investment approaches and implementation methods that meet the needs of schemes that participate in the CIF.
• Appointing and removing the investment managers used for the purposes of the CIF.
• Monitoring the performance of investment managers, including value for money.
• Providing appropriate reporting to the trustees of schemes that participate in the CIF.
• Selecting and monitoring the administrator of the CIF and custodian its assets.
• Managing the processes of investing, disinvesting and restructuring of assets.
2.4. At the time of preparation of this Statement, the CIF Administrator is the Trustee.
2.5 The Trustee’s duties in acting as the CIF Administrator are separate and distinct to its fiduciary and legal responsibilities to members of the Scheme. The role of CIF Administrator could, in theory, be undertaken by another party.
3 Setting investment objectives
3.1 The Trustee has set objectives for its investment strategy in light of an analysis of the Scheme’s projected liability profile, an understanding of the relationship that exists between the value of investments and the actuarial value placed on the liabilities, as well as the constraints the Trustee faces in meeting possible objectives. 3.2 The Trustee’s investment objectives and associated strategy are also set with reference to the guarantee and associated de-risking framework agreed between the Trustee and RTX. The guarantee and de-risking framework agreement are set out in separate documents. 3.3 The guarantee provides the Scheme with security underwritten by RTX, in return for which the Trustee and RTX agree key parameters for the investment strategy, i.e. the benchmark asset allocation and permissible parameters for allowed deviations from the benchmark asset allocation. 3.4 The de-risking framework sets out an agreement between the Trustee and RTX as to how the benchmark asset allocation and permissible parameters may change as the Scheme’s funding position develops , with an objective of reaching a strong funding position with a low-risk investment strategy by t he mid 2030’s. The expectation is that the Scheme will then have limited need to rely on the participating employers or RTX for further financial support. 3.5 A further input into the Trustee’s investment objectives and the resulting strategy are the asset-backed contribution arrangements ( ‘ ABCs ’ ) in place. The ABCs consist of loan notes issued by RTX and held in two Scottish Limited Partnerships in which the Trustee is a limited partner. 3.6 The loan notes will provide capital repayments in 2036, contingen t on the level of the Scheme’s funding position at that time, totalling £320m. Interest payments of 4.1% per annum are payable half-yearly on the loan notes.
UTC (UK) Pension Scheme | Statement of Investment Principles | 22 August 2023
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